In a proposal submitted to the Da Nang Department of Information and Communications, the local Traffic Safety Committee wrote that the unauthorized operations of Uber and Grab could worsen traffic in the city.

The committee asked the department to have internet providers block access to Uber and Grab apps and also asked police to investigate and punish any individual or organization found to be offering transport services illegally in the city.

Department Director Mr. Nguyen Quang Thanh confirmed with local media on March 4 that the proposal is under consideration but more time is needed for study before advising the city’s government on a final decision.

The latest move comes after Da Nang, on November 25, declined to run a pilot car hailing project by Grab. In a statement sent to the Ministry of Transport, Da Nang said Grab’s presence in the city would cause a sharp rise in the number of private cars and taxis, worsening congestion. The ministry had earlier that month asked Da Nang, Hanoi, Ho Chi Minh City, the northern province of Quang Ninh and the central province of Khanh Hoa to allow Grab to launch trial operations.

Mr. Nguyen Tuan Anh, General Manager of Grab Vietnam, told local media the company hopes to meet with Da Nang officials to find a solution to the city’s concerns. Meanwhile, a representative from Uber said the company has not received any notice from Da Nang authorities and is actually focusing on Hanoi and Ho Chi Minh City and does not have plans to expand to Da Nang just yet.

The arrival of Singaporean transport app Uber and the Malaysian-based Grab over the last two years has put traditional taxi drivers, generally made up of men with few resources, under threat.

Accustomed to negotiating the price with passengers before hitting the road, many motorcycle taxi drivers are unable to compete with the rates offered by these apps or with the convenience of booking the service and knowing the price in advance.

Although Grab and Uber have recruited thousands of existing taxi drivers for their fleets, many refuse to join because of an unfamiliarity with new technology or simply because they refuse to give a percentage of their income to the companies.

Last month, Uber had its application to operate on a trial basis rejected for a second time. The company applied for a license after local regulators outlawed its smartphone app-based services in November 2015, due mainly to its failure to establish an independent legal entity in Vietnam.

Market regulators declared that the company behind the ride-sharing service that controls Uber in Vietnam should be held responsible for the app rather than its Vietnamese business unit, which is yet to be recognized as a legal entity by local authorities.

Transport authorities have also asked Uber Vietnam to make changes to its app by registering itself as licensed ride service provider, apart from existing services such as “consulting and management” and “market research and public opinion polling”.

GrabTaxi is the only foreign-run transport service allowed to operate in five cities in Vietnam using registered private vehicles between 2016 and 2018. Uber, however, has been singled out for providing ride-hailing services without legal permission.